2. Overview Each year Mary Meeker produces a comprehensive look at the internet trends that are affecting us now, and for the coming year. We have looked to condense this for you to take the key highlights for your organisation. We have also added our own insight to contextualise the findings as much as possible. While these trends are important, they are at a top level as well as focusing mainly on USA and global trends, therefore make sure to place them within that framework when reviewing. | 2

3. Key takeaways • Need to look at content and approach to succeed in a mobile first world • Adblocking is worth noting, but see it as an opportunity rather than a threat • Video needs to progress, but key stakeholders making progressive movements • Messaging at the core of mobile use, look to the Far East to see where UK market should progress to • Voice search and Artificial Intelligence are the next steps in technological progression, advertising methodology will follow | 3

4. Key highlights | 4

5. Still no ‘silver bullet’ for mobile | 5 • As with most of our clients, Legacy media still makes up for the majority spend • This is because it has a proven track record and matured methods of response • While Internet advertising as whole is on par with time spent, mobile is far behind • For us this shows how advertising delivery hasn’t truly been figured out • The experience for both delivery and tracking are fragmented, which leads to scepticism in results • The likes of Facebook and Snapchat are using their native, in feed platforms to make the experience as intuitive as possible, which is why they are the ones making the biggest strides with advertisers • The ‘$22b opportunity’ is there for Facebook, Snapchat and Google to push towards. As they continue to adapt to user experience that then opens the door to allow advertising to be accepted

6. Adblocking is a symptom of the experience | 6 • While adblocking is the new area that the media press are focusing on, like viewability and fraud were for the past 2 years, it shows us a symptom of what happens when advertising pushes beyond the accepted level • Intrusive ads, larger data bills, slow load times and fragmented experience all lead to a 22% rise in adblocking in the UK YOY • The tracking element has also not been properly communicated which has led to a distrust of what is being recorded by media owners and advertisers • While it was a steady rise on desktop, the smaller screen size and personal connection with our smartphones means the trend has been accelerated on mobile • Native and in-feed offerings such as Facebook, Twitter and Buzzfeed are finding ways to make advertising work for both the user and the advertiser. Like with the previous slide, these will be the winners while those who fail to adapt will continue to see adblocking rise on their sites and traffic eventually fall away

7. Video is still in it’s infancy | 7 • Video is the most engaging form for advertisers and users, and often given the ominous challenge of being the channel which can take on TV • While it is a great medium and definitely the one in which we have seen success in for our clients, the issues that the report mention are ones we must consider • It seems video still needs to find its footing in terms of where it sits in the user journey and how it is interacted with. As with the previous slides, mobile adds another dimension due to how It changes user behaviour • The success MC&C have found it rooted in using video as an initial engagement driver and then using tracking to guide those who have watched the content with more DR-centric digital channels such as Display and PPC. We can then use attribution to give value and prove the worth of video

8. Video evolutions | 8 • As video is looking for ways to grow, we have seen the leaders such as YouTube and Facebook innovate and adapt • YouTube released a new format called ‘Bumper Ads’ which are 6 seconds long and non- skippable. We believe this is their attempt to align with the amount of advertising time TV takes up, as can be seen in the table below: • The format does add creative limitations but can be built in an engagement journey along with other digital elements • Facebook are also changing their algorithm to promote video higher than images, as well as suggesting content similar to ads to make it as assimilated as possible Average Length of content (minutes) Length of advertising (minutes) % of total 60 9 15% 4 0.6 15%

9. Accelerated channel growth | 9 • As each new channel enters the market, it does so at a faster pace • The Internet’s growth is one that shows even with a channel that is not yet mature, advertisers are pushing into it as they see the opportunity to get in front of users • As areas such as content, video and social become more prominent and mature, MC&C expect this trend line to level off but offer more returns on larger investment from our clients • It will take a step change in how to approach digital, due to the difference in the way it is delivered and consumed • TV’s sustained growth is great to see, with all the developments throughout the industry, MC&C still see our key channel holding strong and even improving • TV will always play a pivotal role in media strategy, and it will only become more connected with digital in the future

10. Social part of the buying journey | 10 • Users are now looking to social to inform about what they buy, especially with images • Pinterest is the standout player here, with a much larger % than others, which makes sense given the type of content used and created on the platform • Pinterest recently started allowing advertising in the form of ‘promoted pins’ and have seen great success in engagement and direct response • Instagram have realised this potential by opening up opportunities for businesses, allowing for ‘shop fronts’ and buy buttons • We imagine that e-commerce functionality will make its way into the social space in the next two years, and images/video will be a key driver to get users to purchase • This will further push the reliance of areas outside of clients control for both brand awareness and purchase. The internet experience continues to become more localised in certain apps and sites, meaning brands now need to go to the consumer

11. Messaging accounts for a large amount of mobile use | 11 • Messaging is a large amount of users daily lives, and a variety of apps are used to communicate with friends, and more recently in the UK, organisations • As the messaging apps get built out, more and more functionality is added • WeChat and Line are already established in China and Japan for building payment, search and web functions within their apps • Facebook Messenger has made movements into this area, allowing businesses to interact with users and complete customer service tasks • While useful, and a step in a positive direction with mobile experience, it needs work to overtake the ease of using traditional forms of search and discover

12. Messaging links with the overall mobile framework | 12 • Interesting to see how messaging apps are linking with social platforms to facilitate purchase • As noted earlier, Instagram are moving towards more business focused metrics in the UK, which could be a move to mirror the way purchase happens in the Far East • Facebook owning the properties of Messenger, WhatsApp and Instagram allows for it to have penetration across many different areas of discovery and search and be well set up for future innovations in this space • An evolving space, it is one that we want to keep an eye on, as with the wider ‘mobile payments’ development, but as of yet it would not be a key area to invest in over more traditional routes • Large social presence allows for a quicker uptake of these changes when they become more established, as well as a good content generation framework

13. Traditional communication still very important | 13 • While all these developments are very important, our target markets are still dominated by phone response • Web chat is growing across all sectors, but we need to make sure we utilise the best response rates • We would always look to guide users in the best way for them, and often this is taking the journey back offline • The optimum method under this framework is: Offline discovery (TV/Print/Radio) Online research (Social/Display/Video) Offline conversion (Phone/Direct Mail)

14. Voice and AI are the next big advancement | 14 • Traditional methods for discovery are changing along with the advancements in technology • Now voice recognition is over 90%, the ease of use jumps up significantly. As Andrew NG point out: • The likes of Amazon Alexa, Apple Siri and Facebook M are using artificial intelligence to push the voice activation further and achieve more complicated tasks • As this behaviour becomes more engrained, the likes of PPC and SEO will need to adapt to make sure we stay in front of users wanting to discover information our organisations can answer No one wants to wait 10 seconds for a response. Accuracy, followed by latency, are the two key metrics for a production speech system

15. Thanks Please contact josh@mcand.co.uk to learn how we can build this into your organisation’s thinking

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